SENATE PASSES BILL TO IMPROVE DOCTORS ROLE IN HEALTH DELIVERYThe New York State Senate passed bill S3186, sponsored by Health Chair Senator Kemp Hannon (R – Garden City), which amends the public health law, in relation to requirements for collective negotiations by health care providers with certain health benefit plans.

“There is a need to restore fairness in the contracting process between health care providers and large managed care plans by allowing such providers to join together to negotiate contract provisions. That’s exactly what this legislation is designed to do,” said Senator Hannon.

Currently, federal antitrust laws prohibit individual health care providers from collectively negotiating any provisions of contracts they sign with managed care entities. This bill would allow health care providers in New York State to conduct some collective negotiations by creating a system under which the state would closely monitor those negotiations, facilitate resolution of negotiation impasses, and actively monitor implementation of agreements. Negotiations involving fee-related matters would be prohibited unless an individual managed care plan controls a substantial share of the managed care market.

Giving health care providers greater ability to advocate for patients in contract negotiations is critical since large health maintenance organizations control huge shares of the health insurance market, both in New York and across the country. In the last few years we have seen the mergers of United Healthcare and Oxford, MVP and Preferred Care, and Wellpoint with Wellchoice (Empire). As of March 2008, almost 75 percent of the enrollees in managed care plans in New York State were enrolled in just five health plans (GHIIHIP, United/Oxford/Amerchoice, Excellus, Empire and MVP/Preferred Care.

We have also seen an emerging trend of long-time not-for-profit health insurance companies such as Empire and HIP seeking to convert to for-profit status. Due to the current imbalance of negotiating power in favor of the managed care plans, physicians and other health care providers are offered take-it-or-leave-it contracts by health plans that significantly hamper their ability to provide quality patient care.

These contracts permit burdensome processes and unjustifiably long wait times for obtaining pre-authorization to provide needed patient care; impose limitations on whom a physician or other health care provider may refer a patient for necessary care; permit demands for refunds of payments long after the time that such payments were originally made; permit health plans to make major changes to key elements of a contract without physician or other health care provider consent; and cede to physicians and other health care providers the legal consequences for patients harmed by health plan utilization review decisions.

This bill, by allowing independent contractor physicians and health care providers to conduct some collective negotiations while being closely monitored by the state, would give physicians and health care providers greater ability to advocate for patients in contract negotiations. Additionally, it would create a system under which the state would closely monitor those negotiations, and any negotiations involving fee-related matters would only be permitted when an individual managed care plan controls a substantial share of the managed care market. This legislation would not authorize strikes or boycotts of health benefit plans by physicians.